Click here for Part I, Part II, Part IV & Part V

Forging a new era for plant-based medical treatments

Dean Petkanas is the CEO of Kannalife Sciences, a biopharmaceutical company that researches and develops medical and therapeutic applications of cannabinoids—chemical compounds derived from the cannabis plant. Founded in 2010, Kannalife Sciences focuses its efforts on creating treatments for brain diseases, disorders, and conditions such as Alzheimer’s disease, epilepsy, stroke, Arterial Lateral Sclerosis (ALS), Parkinson’s disease, and more. The company has the distinction of holding an exclusive license with National Institutes of Health – Office of Technology Transfer (“NIH-OTT”) for the Commercialization of U.S. Patent #6630507, “Cannabinoids as Antioxidants and Neuroprotectants.” Kannalife has earned recognition as medical innovator for its research on the use of cannabinoids as a neural protector to treat Chronic Traumatic Encephalopathy (CTE). Numerous publications, including Sports Illustrated, have featured the company and identified its research as a possible solution for professional football players and other athletes who regularly suffer repeat brain injury.

Q. How did you transition from an investment banking career to your current position? Was it difficult to start fresh in a very specialized industry?

DEAN PETKANAS: I have a little bit of background. My background on Wall Street as an investment banker covered some biotechnology work that I did, and it gave me at least the foundation and the guts to take the risk in this space. I also noted that the cannabinoid therapeutics market was ready to really emerge from the pharmaceutical side, and part of that conviction came from GW Pharamceuticals—saying, “Well, they’re already there, and they’re proving themselves out, and the marketplace is rewarding them.” They got rewarded by Bayer, by Novartis, by Otsuka Pharmaceuticals, by Wall Street. I think if you’re a pharmaceutical company, you need that staying power.

Now, the difference was that when my business partner came to me and wanted to be on the agricultural side, my economics background kicked in. I became highly defensive to that, in the sense that I predicted what happened in the State of Washington a year and a half to two years before it happened, which is price disintegration. You had inelasticity in a market of price because you had a closed, highly regulated market; no interstate commerce; and the inability to get outside of the borders of a particular state from a legal perspective. That’s setting aside the black market, which is also a dynamic. I mean, you could go into New York right now: there are plenty of people that won’t go and get a red card in New York because the price of the black market products are cheaper than what’s being sold by the producers, and that’s a fact.

When you have that kind of inelasticity, and you can see it before the markets start to develop on the medicinal side, it gives you the strength and conviction to say, “Okay, I’m going to be on the other side of the Snake River Canyon. I don’t want to be Evil Knievel in a rocket launcher, going straight up and straight down.” That isn’t to say that the agricultural participants aren’t going to make an effort to get to the other side, which is the pharmaceutical side, but they have to build a better rocket sled and I don’t think they’re quite there yet. It would have been a very long haul for us to try to be a pharmaceutical company from the agricultural side, so the decision to be there from the beginning was calculated.

Q. Do you have a personal connection to cannabidiol and to the particular patent Kannalife has an exclusive license for?

A. Years back, I wrote a paper for a publication. I still consider publishing or having it published in Supreme Court Stories. You had to write at least a volume of 40–45 pages as a journal to the critique of Supreme Court’s decision-making process as a body. I wrote a piece on a case called Gonzales v. Oregon, which was a case that started as Ashcroft v. Oregon, involving the Death with Dignity Act and the use of palliative drugs to treat diseases or to end life.

I found that there was a disconnect between the states’ rights in the Yukon Supreme Court and states’ rights in Death with Dignity with regards to palliative care drugs being used to end a life—which the Supreme Court voted in favor of—versus palliative drugs like cannabis to preserve a life—which they voted against. States’ rights in California were not the states’ rights in Oregon, so I had a personal connection to that.

I wrote the paper in late 2006, and when Tom came to me with what he wanted to do, I said, “Read the paper first.” I had to take about nine months of his constant insistence that I involve myself into what he wanted to do, to a point where I said, “I’m leaving unless we turn this into a pharmaceutical opportunity.” When I did the research and I started to dig in, and put the rules and the filter in place of where I thought the company should be positioned initially and through a process, I stumbled onto the disease of hepatic encephalopathy, and it seemed to coalesce nicely with the government’s patent, which was then a rule. I called him with what I had unearthed, and he told me—at that point for the first time—that his father had the disease.

I felt a personal conviction and a strong desire to continue to move forward and do it at all costs. It’s been very costly, personally, in the sense that you do’ot see the monetary rewards. You just keep pushing towards the goal and doing whatever you can to push towards that goal, so certainly you don’t disrespect what the call was, in that sense.

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